{"id":7256,"date":"2020-06-10T10:00:33","date_gmt":"2020-06-10T10:00:33","guid":{"rendered":"https:\/\/thezakariagroup.com\/is-a-recession-here-yes-does-that-mean-a-housing-crash-no\/"},"modified":"2020-06-10T10:00:33","modified_gmt":"2020-06-10T10:00:33","slug":"is-a-recession-here-yes-does-that-mean-a-housing-crash-no","status":"publish","type":"post","link":"https:\/\/thezakariagroup.com\/is-a-recession-here-yes-does-that-mean-a-housing-crash-no\/","title":{"rendered":"Is a Recession Here? Yes. Does that Mean a Housing Crash? No."},"content":{"rendered":"
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On Monday, the National Bureau of Economic Research<\/em> (NBER) announced<\/a> that the U.S. economy is officially in a recession. This did not come as a surprise to many, as the Bureau<\/em> defines a recession this way:<\/span><\/p>\n “A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”<\/em><\/p>\n<\/blockquote>\n Everyone realizes that the pandemic shut down the country earlier this year, causing a “significant decline in economic activity.”<\/p>\n Though not surprising, headlines announcing the country is in a recession will cause consumers to remember the devastating impact the last recession had on the housing market just over a decade ago.<\/p>\n The real estate market, however, is in a totally different position than it was then. As Mark Fleming, Chief Economist<\/em> at First American<\/em>, explained<\/a>:<\/p>\n “Many still bear scars from the Great Recession and may expect the housing market to follow a similar trajectory in response to the coronavirus outbreak. But, there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it.”<\/em><\/p>\n<\/blockquote>\n Four major differences in today’s real estate market are:<\/p>\n We must also realize that a recession does not mean a housing crash will follow. In three of the four previous recessions prior to 2008, home values increased<\/a>. In the other one, home prices depreciated by only 1.9%.<\/p>\n Yes, we are now officially in a recession. However, unlike 2008, this time the housing industry is in much better shape to weather the storm.<\/p>\n<\/div>\n\n
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Bottom Line<\/strong><\/h3>\n